Bed Bath & Beyond Inc. Is opening new distribution centers as part of a $300 million push to improve its supply chain and keep shelves stocked as retailers grapple with product shortages.
The home-goods chain will partner with logistics specialist Ryder System Inc. To develop a pair of facilities—one in Pennsylvania slated to open later this year and one in California next year. The effort is designed to cut replenishment times at Bed Bath & Beyond and Buybuy BABY stores to 10 days from the current 35.
Executives acknowledge that the existing fulfillment process can be cumbersome, with products moving from vendors to smaller facilities before eventually ending up at stores or in customers’ homes. The new, larger centers will help streamline the process.
“We have to have the inventory in the right place at the right time,” John Hartmann, Bed Bath & Beyond’s chief operating officer, said in an interview. “We haven’t because of this inefficient system. It’s a critical part of this reinvention of the company to have a supply chain that meets the customer where she is.”
This is the latest step in an ongoing turnaround effort for Bed Bath & Beyond, which struggled for years with weak sales and rising competition. Under Chief Executive Officer Mark Tritton, who took the helm in 2019, the company has sold assets and cut costs while also pursuing store renovations and technology improvements. The home-decor chain recently unveiled its redesigned New York City flagship and has been introducing private-label brands.
Ryder will run the new distribution centers, and each location is expected to create 300 jobs. The Miami-based firm uses the help of robotics and analytics to store and move product through distribution centers.
“This is going to be a highly automated facility,” Steve Sensing, Ryder’s president of global supply chain solutions, said in an interview. He noted that tens of thousands of cartons with items will be moving through Bed Bath & Beyond’s facilities on a daily basis.
In the next couple of years, Bed Bath & Beyond plans to build four or five regional distribution centers, Hartmann said.
Bed Bath & Beyond shares rose 2.4% to $29.40 at 9:52 a.m. In New York. The stock has gained 62% this year through last week’s close.
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